Amazon launches ad-supported Kindle

Further driving down the cost of media tablets, Amazon on Monday announced the availability of the lowest-priced Kindle to date.

Kindle with Special Offers, which normal people will think of as Kindle with Ads, will be available on May 3 for $114. That compares with $139 for a regular Kindle and $189 for a 3G model.

“We’re working hard to make sure that anyone who wants a Kindle can afford one,” said Jeff Bezos, Amazon.com founder and CEO, in a statement.

Bezos called Kindle “the best deal in consumer electronics anywhere in the world.”

Of course, the deal comes at a price: The newest Kindle displays special offers along the bottom of the home screen, in addition to sponsored screensavers. Special offers that will be available in coming weeks include a variety of Amazon-centric, Groupon-like deals, such as $10 for a $20 Amazon.com gift card or $6 for six books from Amazon-owned Audible.com.

Strategically, the move is likely to increase the spread of Kindles throughout the land. Which means that should Amazon choose to develop a tablet that challenges the iPad, as some analysts have suggested they might, they can count on a large installed base of users already familiar with the platform. And if they don’t, they’ll still benefit from thousands more customers buying e-books through Amazon.